All Forum Posts by: Konnea Mcandrew

I'm a brand new wholesaler so I have a lot of rookie questions. Please let me know if I have the steps right: After analyzing the property, a wholesaler would:

1. Visit the Property

2. Negotiate with a seller for a discounted rate

3. Send an offer letter on the property (and possibly proof of funds)

4. Conduct a home inspection (who pays for the home inspection, the wholesaler, or the end buyers?)

5. Put $1,000 in Escrow with your Closing Company as Earnest Deposit for The Purchase (who provides the earnest money, wholesaler or end buyers?)

6. Review and Sign a Purchase Agreement and Assignment Contract (Based on this template https://judicialtitle.com/pdf/AssignmentContractPurchaseReal...the assignment is signed by both the wholesaler, the end buyers and the seller. So, generally, do Wholesalers have the seller sign this document initially and then once they secure a buyer, the buyer signs to complete the document?)

7. Reach out to your cash buyers network about the property

8. Buyers visit the property

9. Negotiate a purchase price for your buyer

10. Buyer sends an Offer Letter (and possibly proof of funds)

11. Buyer reviews and signs the Assignment Contract and is provided the Purchase Agreement (does this mean that the end buyers does not have to pay any earnest deposit costs or home inspections?)

12. Buyer wires funds to closing company (if buyer is using hard money/private lenders, how is this notated in the deal. For instance, there are often mortgage contingencies, are there any contingencies for hard money financing?)

13. Funds distributed to wholesaler and seller minus closing costs (I'm very confused here. In double-closings, once the funds are wired, the closing company pays the seller, the wholesaler and keeps their fee. How does it work in a standard wholesale deal? I understand that if not a double-closing, the wholesaler fee/commission is itemized on the buyer's..."HUD" or Purchase and Sale Agreement? Is this itemized/line item number disclosed to the end buyers prior to closing?)

Sorry for the rookie question, hopefully I can get this sorted out soon!

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Thanks for the feedback! I'm actually doing distressed properties. I also have access to off market deals, but for our on-market inventory I was curious as to if I'd need a buyer's agent since the listing agent is involved. I've spoken with agents in my area that are delighted to work with me knowing I offer wholesaling. Do you guys recommend anything for on-market wholesale deals and buying agents?

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Do I need a buyer's agent for wholesale deals if I'm selling on-market assignments/properties listed by an agent. And if so, would the agent represent me, as the wholesaler, or my end buyers.

Also, what type of returns do investors anticipate on fix and flips. (i.e. 70% ARV)

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Quote from @KC Pake:

Quote from @Gabriel Jordan:

Hi,

As mentioned above, my dad's neighbor bought a place downtown and is looking to offload the property. I naturally raised my hand as interested but don't have the cash to buy it outright (this would be my first rental). Anyone have any recommendations on creative ways to solve this that they have done in the past? I have heard some people talk about assuming their loan but no idea how that works exactly.

Thanks in advance!

Gabe

Hello Gabe,

Exploring creative financing options for real estate can be exciting, especially for your first rental property. Here are a few strategies you might consider:

Loan Assumption: Assuming the seller's mortgage means taking over their existing mortgage payments. This can be a viable option if the mortgage terms are favorable and the lender allows it. You'll typically need to qualify for the loan and may need to pay a down payment or assumption fee.

Seller Financing: The seller acts as the lender. You make payments directly to them under agreed terms. This can be flexible but requires the seller to be financially secure enough to not need the full sale price upfront.

Lease Option: You lease the property with an option to buy it later. This can give you time to build up a down payment and creditworthiness.

Partnership: Partnering with someone who has the financial resources but not the time or interest to manage a property can be beneficial. You could manage the property while they provide the capital.

Home Equity Line of Credit (HELOC): If you own another property, you might be able to get a HELOC to finance the purchase.

Crowdfunding or Private Money Lenders: These sources can offer more flexible terms than traditional banks.

Remember, each method has its pros and cons and it's important to understand the risks involved.

Best of luck with your real estate endeavor!
KC

Hi KC,

Great feedback! I was curious as to the Property Management option. Can you talk a bit more about this? For instance, I'm under the impression that the key areas of management for the rental property should be at least an ability to provide ongoing maintenance and cleaning. Not to mention landscaping, pest control and other standard monthly expenses tenants have.

How would you recommend someone just getting started getting involved in property management, even if the partner has the financial resources/capital. For instance, I believe property management companies generally charge a fee, although this can vary, of a percentage of the monthly rents from the property. i.e. 1-3% of the rent.

If you're getting started, how would you cover the standard fees that it generally takes to manage the property (i.e. maintenance, landscaping, showings) without a staff. Is this something the partner/investor could cover?

1 Vote

Quote from @Ryan Kelly:

@Konnea Mcandrew as others have said, you should focus on education and building up your cash reserves first. Buying real estate isn't just about the purchase price. There are closing costs, repairs, maintenance, taxes, vacancy, and a whole host of other expenses you haven't yet factored in. This is the time to LEARN and EARN, then you can invest once you have the proper reserves to move forward. Use a lack of funds as motivation to keep moving forward.

Where can I find mentors on these topics? Particularly when you're just getting started and you're finding deals, earning fees and learning. Not an online course, but actual mentors like SCORE with the Small Business Administration

Thank you!

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Quote from @Jose Jacob:

Quote from @Konnea Mcandrew:

Wow everyone, I'm so glad you told me, I appreciate your feedback!

The idea of joint venturing is similar to Private Money Lending and Wholesaling Deals from my understanding.

With Wholesaling, I need to a contract (with the seller I believe), a buyer's list and great deals

What I'm not quite understanding is: why would a seller go through a wholesaler when they could work with a licensed agent? It seems like it's more attractive to developers or fix and flip investors, but I haven't done a deal yet so I'm not quite sure

What are you guys thoughts on wholesaling, private money lenders and joint venturing? Is it true that it's a great way to get started in real estate with no money down

Do you guys have any resources you could recommend for business models like this (i.e. Private Money Lenders, Wholesaling)

I was looking into Chris McClatchey from the REIA site, but found the site a bit confusing

Any recommendations to get started?

I think my options for no money down investing in real estate are:

* Wholesaling

* Joint Venturing

* Private Money Lenders

* Subject To Deals

* Seller Financed

In regard to Seller Financed, I believe I can negotiate a mortgage and monthly payment with the seller. My idea is to rent out the property to a tenant and allow the tenant to cover the mortgage payments. Is this a reasonable or bad idea?

Where can I find great real estate mentors?

Or should I not be even thinking about real estate until I get more cash?

Sorry if the questions are all over the place, rookie questions :)

Hello Konnea

Social media is bombarded with so called GURU's who want to sell their courses and make some money. REI is not that easy to make ton of money. It is a slow process not a quick buck game. With your questions, I can see that you are all over the place with lot of outside info in your mind. REI has so many branches(strategies). It is hard to answer all of your question at once. Let me answer some of it.

If you have no money, your choice of finding a seller who are trying to retire or want to hold a seller financing and negotiate a good deal and rent the house out and keep the difference between the mortgage and rent. Don't forget to calculate all the other expenses like, insurance, repair escrow, vacancy etc.

You listed your options :

Wholesaling : This is doable if you know how to it. The key factor here is to find OFF market deals with a pretty good margin like 40-50 cents on a dollar. If you can't find OFF market properties with deep discount, this method will not work and lot of wholesalers fail due to this reason

Joint Venture: This method is good for you if you can find good deals which has good margin for both of you (the other investor and you). JV is that you find a property and partnering with an other investor who has money to do the deal. There are several JVs who would love to work with you including me.

Private Money Lenders : Not a choice for you due to the lack of your own capital. They only give you 70-80% of LTV and you have to find your own capital to close and renovate, if you choose to fix&Flip and most of them need you to have some experience in the field.

Subject to: A great way to accumulate rental properties if you can convince the home owner. If you can target foreclosure houses or absentee or tired landlords this is an excellent method.

Seller Financed : This will also work in LTR strategies. Find how owners with 100% equity.

Your question about "why would a seller wholesale a property if they could go through a Realtor to get market value" The answer is Seller wholesale a property if the house is in destress like, the house is in foreclosure, estate sale, probate or houses that need full renovation. A regular buyer through a Realtor may not buy those houses due to extensive repairs.

JV is not similar to private money lending and wholesaling. Those are three strategies of REI. Explanation is in my answers above.

Hope you got a idea about different strategies of Real Estate Investing. Let me know if you have anymore questions. I am glad to help

Hi @Jose Jacob

Thank you for your feedback!

I'd be delighted to work with you as well. I visited your company website and reviewed the services. It seems that you have a focus on residential real estate, that's awesome!

Please feel free to contact me

Looking forward!

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Wow everyone, I'm so glad you told me, I appreciate your feedback!

The idea of joint venturing is similar to Private Money Lending and Wholesaling Deals from my understanding.

With Wholesaling, I need to a contract (with the seller I believe), a buyer's list and great deals

What are you guys thoughts on wholesaling, private money lenders and joint venturing? Is it true that it's a great way to get started in real estate with no money down

Do you guys have any resources you could recommend for business models like this (i.e. Private Money Lenders, Wholesaling)

I was looking into Chris McClatchey from the REIA site, but found the site a bit confusing

Any recommendations to get started?

I think my options for no money down investing in real estate are:

* Wholesaling

* Joint Venturing

* Private Money Lenders

* Subject To Deals

* Seller Financed

Where can I find great real estate mentors?

Or should I not be even thinking about real estate until I get more cash?

Sorry if the questions are all over the place, rookie questions :)

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I am under the impression that at a capital amount ($1k - $5k) this low, one is only able to possibly purchase tax liens/deeds.

However, I see YouTube ads of investors who state that $1k in a rural area perhaps, could purchase you a multi-family unit (i.e. duplex) that you may have to live in due to the loan requirements (i.e. rural development loans)

What are you guys thoughts? I have no credit available and $5k cash.

Does anybody know how to invest in real estate without debt products and alternative financing (i.e. subject to, wholesaling, REITs)

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All Forum Posts by: Konnea Mcandrew

Konnea Mcandrew has started 4 posts and replied 10 times.

Post: Rookie Questions - Wholesalers

Post: Are there any Real Estate Mentors or Coaches Available

Post: Rookie Questions - Wholesalers

Post: Do I need a buyer's agent for wholesale deals for on-market assignments

Post: Do I need a buyer's agent for wholesale deals for on-market assignments

Post: Looking for creative ideas on financing/ deal structure for my dad's FSBO neighbor

Post: How would you use $1k - $5k to start investing in Real Property/Estate

Post: How would you use $1k - $5k to start investing in Real Property/Estate

Post: How would you use $1k - $5k to start investing in Real Property/Estate

Post: How would you use $1k - $5k to start investing in Real Property/Estate